About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Monday, April 12, 2010

Stock Market -- On Thin Ice Short Term

My rather simplistic view here is the length of time that has gone
by since this rally started in early Feb. is simply sufficient to warrant
a pullback of substance either this week or next. So, I am looking
at the prospect of a small short position.

I am mindful of the many commentators, myself included, who have
pointed out for the past few weeks that the stock market is over-
bought. And, it is. But the progress of the rally has thwarted the
attempts to topspot the market with OB / OS formulas.

So the tactic I plan to follow involves waiting for a clean break of
trend to the downside starting with watching for the market to
crack down and through the 10 and 25 day ma's with enough force
to invite both of the latter to roll over as well. If there is no break
of substance, I'll just keep the powder dry.

Check out the SP500 chart and see what you think. Chart.

2 comments:

Chris said...

Peter,
My March 18th post is still alive and well! The 1227 high then a pullback to old resistance "new support" at 1145-1150. I think it will be a pullback that last about 3 weeks with the S&P giving up about 25 points/week. Time will tell. I also see a possible pullback to around 1070 if the support at 1150 gets broken. I'm connecting the lows from November 2009 and February 2010 for a trend line support. If you have time Peter, take a look at my archived post from March 2009. Market timing is an art of the 3 P's. Persistence, Patients, and Passion. The passion part is one that refers to taking a look at the charts on a consistant basis, nothing to do with feelings, desire or emotion. Technical Analysis like candle patterns and divergences in indicators also seem to help.
Chris

Rich said...

Stocks are just trading the way that commodities used to trade. VERY trended. The recent complacent magazine covers- Business Week & Newsweek- are troubling.